Pork Producers Making Small Production Cuts

Pork Producers Making Small Production Cuts

Fourth quarter live hogs could average $42.50

Friday USDA will release the results of their latest survey of the U.S. swine industry. 


Ron Plain, University of Missouri economist, estimates the June 1 breeding herd was 2.0% smaller than a year ago. Market hog inventory was 0.9% smaller and the total herd was 1.0% smaller than on June 1, 2008.


Fewer Canadian hogs coming here. Total slaughter of barrows and gilts was down roughly 3.4% during March-May due, in large part, to a 56% drop in imports of slaughter hogs from Canada. 


Slaughter of U.S. raised hogs was a bit higher than expected based on the March inventory report. Since June 1, slaughter of U.S. raised barrows and gilts has been up about 1% compared to the same weeks last year.


Inventories by weight groups. Plain estimates June 1 market hog inventories by weight groups as:


·        180 pounds and heavier 101.2% of a year ago.

·        120 to 179 pounds 99.0%.

·        60 to 119 pounds 98.0%.

·        Under 60 pounds 99.0% of a year earlier.


Producers trim cuts. Producers told USDA for the March survey that they intended to cut March-May farrowings 2.9% below last year. They indicated they´d trim June–August farrowings by 4.0%. 


"I'm estimating spring farrowings actually were down only 1.0% and summer farrowings also will be down 1.0%," says Plain. "I'm forecasting fall farrowings to be down 0.8% compared to September-November 2008. 


"Declining feed prices in the second half of 2008 halted what had been a rapid reduction in the sow herd," he says. "December-February sow slaughter was 7.4% lower than a year earlier and March-May sow slaughter was down 15.2%."


Plain estimates that pigs per litter were up 1.8% this spring. He pegs the March-May pig crop at 100.8% of a year earlier. Feeder pig imports during March-May were 25% below last spring's level.


No price surge likely. "My estimate of hogs in the 60 to 179 pound weight groups implies that third quarter daily hog slaughter will be 2% to 3% below year-ago levels, if the inflow of slaughter hogs from Canada continues to be down. 


"I expect live hog prices to average close to $47 per cwt ($62 per cwt carcass) in the third quarter of 2009.


"Fourth quarter slaughter could be down a more modest 1% to 2%," he adds. If so, look for fourth quarter 2009 hog prices to average close to $42.50 on a live basis and $55 on a carcass basis."







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